The following is a post that I wrote earlier this semester for Inside Higher Ed’s Call to Action marketing and communications blog.
A corporate CMO expects to control her organization’s marketing expenditures. But universities operate differently.
On most campuses – and especially at large universities – marketing budgets are spread across schools, departments, and offices such as enrollment. These entities often have substantial autonomy on what they spend and where, and the institution’s CMO may have little authority over strategy and execution.
Marketing budgets vary widely across our sector. According to Educational Marketing Group, public and private nonprofit institutions typically spend anywhere from 1.5–6.0 percent of the institution’s annual operating budget on marketing. (In 2010, that range was 1.0–4.0 percent.)
Being able to centralize marketing expenditures and exercise efficiencies with regard to where and how they occur is an essential underpinning for marketing success, as University of Albany vice president Joe Brennan argued in a recent webinar. While this scenario is ideal, it would represent a significant departure on most campuses and require senior leadership to address multiple political issues. Thus, it is not always feasible, particularly when decentralized structure and operations are part of an institution’s fabric.
Decentralization can be especially deep-rooted if an institution has a responsibility-centered management (RCM) budgeting model, where academic units have ownership of their revenue and expenses. With responsibility for the financial ramifications of their decision-making, deans can invest as much – or as little – as they wish in marketing.
Centralizing marketing spend, or even moving in this direction, is a long game. As a first step, CMOs need to understand the current total marketing expenditures across their institution.
If you hold a central marketing leadership position at your college or university, can you answer this baseline question: What percentage of your institution’s overall marketing expenditures come from central marketing?
I posed this question to attendees at the CASE Annual Conference for Marketing and Branding this past summer, and 30 percent did not know. I surveyed marketing colleagues at fellow Big Ten Conference universities, and just under half did not know.
Of Big Ten colleagues who did know or could estimate, on average approximately one-fourth of the institution’s overall marketing expenditures came from central marketing – not a surprising figure considering the size and scope of these universities. So, not only is marketing spend decentralized, but themajority of expenditures occur outside of central marketing.
When centralizing marketing spend is not realistic, what steps can marketing leaders take? Define, track, and add value.
Define
Benchmarking spend – whether across an institution or across higher education – is a challenge because there is no standardization in what we count. In Rework (on my short list of favorite marketing-related books), authors Jason Fried and David Heinemeier Hansson explain, “Marketing is something everyone in your company is doing 24/7/365.” This holistic view of marketing is audience-centric and considers all touchpoints. But if “everything is marketing,” how do we begin to track marketing spend?
For budgeting and tracking purposes, we need to put a box around marketing. Ensure that units across your institution are counting the same thing. Furthermore, develop a definition that accounts for the purpose of the work at your institution (Are you targeting an external audience? Does the work ladder up to your institution’s strategic priorities), not just the tactical form it takes (print, digital, etc.)
Track
You can’t determine ROI without first knowing the “I.” Once you have a budgetary definition of marketing, you have a foundation for tracking. Colleges and universities may track total marketing spend by reviewing purchasing data, but inconsistencies in purchasing codes or inaccurate coding can prove frustrating. A more proactive approach is to track projected spend by collaborating with units and having them share marketing plans and budgets with you. Of course this approach only works if you have built up the requisite trust on campus.
Add Value
One you have the information, use it! Use it to help drive longer-term marketing effectiveness and efficiency. Use it to analyze working versus nonworking dollars. Use it to inform how you structure your central marketing team and the strategic resources it provides across the enterprise. Perhaps you need to enhance market research capabilities centrally or ramp up education opportunities for marketing colleagues. While you may not control unit-based marketing investments, identify high-return areas that you can strategically influence.
NC State’s “lead and support” model of centralized decentralization and Arizona State’s enterprise marketing hub both serve as examples. These collaborative approaches add value to unit-based marketing efforts, helping marketing expenditures go further for individual units and the institution.
